The move makes the virtual card function more like a traditional prepaid card.Previously, the Square Cash virtual card would be easy for customers to use for online purchasing. Because it had no physical companion, using the product in person was challenging — Recode noted that it would be uncommon for a user to read off their card number in a grocery store, for example. The new partnership brings the card into the physical realm in a big way, because Apple Pay is accepted at 35% of US retailers and expects to nearly double that in 2017.

But if customers weren't using Apple Pay before, it's not clear that said integration will cause them to start using it now. US Apple Pay adoption has stagnated just below a quarter of eligible users, according to data from PYMNTS and InfoScout. That could be largely a result of consumer disinterest. If users haven't loaded their traditional credit or debit cards into Apple Pay, it's unlikely they would adopt the service through a niche product like the virtual card. That said, it's worth noting that there could be a compelling use case here for Square Cash users that might find themselves having lost or forgotten their other cards in-store.

However, the move shows Square is doubling down on Square Cash, likely as part of a move to grow smaller platforms within its software and data service segment. Revenue from Square's software and data segment has been consistently on the rise. Even more, as that segment grows, it continues to increase its profitability. But Square Cash isn't a major contributor to the segment, which is largely driven by Square Capital, the firm's small business lending offering, Instant Deposit, and Caviar. Adding new use cases for Square Cash could increase user reliance on the product, which could grow revenue.

Mobile payments are becoming more popular thanks to services such as Apple Pay, but they still face some high barriers, such as consumers' continued loyalty to traditional payment methods and fragmented acceptance among merchants. But as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years.

BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile payments that forecasts the growth of in-store mobile payments in the U.S., analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and addresses the barriers holding mobile payments back as well as the benefits that will propel adoption.

Here are some key takeaways from the report:

In our latest US in-store mobile payments forecast, we find that volume will reach $75 billion this year. We expect volume to pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.

Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.

Integrated loyalty programs and other add-on features will be key to mobile wallets taking off. Consumers are showing interest in wallets with integrated loyalty programs. Other potential add-ons, like in-app, in-browser, and P2P payments, will also start fueling adoption. This strategy has been proved successful in China with platforms like WeChat and Alipay.

In full, the report:

Forecasts the growth of US in-store mobile payments volume and users through 2020.

Reviews the performance of major mobile wallets like Apple Pay and Samsung Pay.

Addresses the key barriers that are preventing mobile in-store payments from taking off.

Identifies the growth drivers that will ultimately carve a path for mainstream adoption.

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